The Ukrainian government and the National Bank of Ukraine jointly face foreign currency debt payments in excess of $24 billion in 2020-2022, including interest. The NBU report on financial stability says most of this amount will need to be refinanced in foreign markets, therefore cooperation with the International Monetary Fund and other international financial organizations is critically important.
According to the NBU, in early December the yield of dollar eurobonds in Ukraine was in the range of 4-7% depending on the maturity, while a new three-year program with the IMF will further reduce the cost of sovereign and corporate borrowing.
The NBU says, with continued structural reforms, receipt of planned tranches from the IMF and the absence of significant macroeconomic shocks, the state and state-guaranteed debt of Ukraine will decrease to 50% of GDP at the end of 2020 and 48% at the end of 2021. The main factors for this will be GDP growth and budget deficit control as a result of a balanced fiscal policy. Moreover, due to the improvement of the debt structure, not only the debt burden, but also currency risks will decrease.
The NBU called significant external payments on public debt the main macroeconomic risk as of today. Also among the key risks are the reduction or complete halt of Russian gas transit via Ukraine from 2020, the cooling of the global economy and the delay in implementing structural reforms. (UNIAN/Business World Magazine)